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College can be a lot like purchasing a home!
However, many families fail to treat it like a major purchase. Let me give you an example.
When I ask families how much it costs to go to Butler, I usually get a response of $40,000. This is not the real cost. This is what I like to call the infomercial cost. For 4 easy payments of $40,000 your student can get their very own college education.
I am not picking on Butler. All colleges advertise their price in this manner. Many families think of college cost in annual terms. The real cost of Butler would be $160,000 after tax (if your student can get through in 4 years)! A family in a 25% tax bracket would have to earn $213,333 after paying taxes to cover the $160,000. This is the price of a house.
Now think about how you would or may have purchased a house. Do you start out by looking at the biggest and best houses? For most families they get prequalified for a mortgage so they can figure out what they can afford or they may tell their realtor to stay within a certain range. Most families will not take on a $5000 a month mortgage payment when they can only afford $1800.
Most families approach college just the opposite. They tell their student to research what school they would like to attend. Then they try to figure out how much to pay once the student has picked the school. Remember parents you are dealing with a 17 or 18 year old who sees all of their classmates going to college. It is natural for them to assume you have an endless pot of money to finance their education as well!
I would suggest having an open financial dialog with your student so they have a great understanding of what to expect financially before they go to all the effort of applying to their list of top colleges. This is an even better time for parents to do some holistic planning so they have a realistic idea of what they can afford and how it will impact other areas of their financial well being!
Are you satisfied with the path you are on for making college affordable? Is that path leading your family in the right direction?
If you do not know the answers to those questions, you are probably the same as most of us – so busy making a living that we do not take the time to plan where we are going.
Indy College Funding wants to help you stop and think about where you are and where you are going with your college planning. We believe many families can benefit from a comprehensive college plan.
Call or email me today to set up a time we can speak for 5 to 10 minutes to see if we would be a good fit. The sooner you begin the more potential savings you can realize.
317.791.9860